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Banking Passivity and Regulatory Failure in Emerging Markets: Theory and Evidence from the Czech Republic

Hanousek, Jan; Roland, Gérard - C.E.P.R. Discussion Papers - 2002

We present a model of bank passivity and regulatory failure. Banks with low equity positions have more incentives to be passive in liquidating bad loans. We show that they tend to hide distress from regulatory authorities and are ready to offer a higher rate of interest in order to attract...

Persistent link: https://www.econbiz.de/10005123959

Leverage and Asset Bubbles: Averting Armageddon with Chapter 11?

Miller, Marcus; Stiglitz, Joseph E - C.E.P.R. Discussion Papers - 2009

driving asset prices to ‘overshoot’ equilibrium when an asset bubble bursts - threatening widespread insolvency and what …

Persistent link: https://www.econbiz.de/10008528524

Firm Default and Aggregate Fluctuations

Jacobson, Tor; Kindell, Rikard; Lindé, Jesper; … - C.E.P.R. Discussion Papers - 2008

This paper studies the relation between macroeconomic fluctuations and corporate defaults while conditioning on industry affiliation and an extensive set of firm-specific factors. Using a multiperiod logit approach on a panel data set for all incorporated Swedish businesses over 1990-2002, we...

Persistent link: https://www.econbiz.de/10005504257

Multiple Versus Single Banking Relationships

Detragiache, Enrica; Garella, Paolo; Guiso, Luigi - C.E.P.R. Discussion Papers - 1997

This paper develops a theoretical model in which firms may choose multiple banking relationships to reduce the risk that financing will be denied by ‘relationship banks’ should the latter experience liquidity problems and refuse to roll over lines of credit. The inability to refinance from...

Persistent link: https://www.econbiz.de/10005504283

Liquidity Constraints, Production Costs And Output Decisions

Povel, Paul E M; Raith, Michael - C.E.P.R. Discussion Papers - 2000

This paper analyses the interaction of financing and output market decisions in an oligopolistic setting. We integrate two ideas that have been analysed separately in previous work: some authors argue that due to risk-shifting, debt (leverage) makes a firm 'aggressive' in its output market;...

Persistent link: https://www.econbiz.de/10005504397

Multiple Lenders and Corporate Distress: Evidence on Debt Restructuring

Brunner, Antje; Krahnen, Jan Pieter - C.E.P.R. Discussion Papers - 2004

In the recent theoretical literature on lending risk, the common pool problem in multi-bank relationships has been analysed extensively. In this Paper we address this topic empirically, relying on a unique panel dataset that includes detailed credit-fie information on distressed lending...

Persistent link: https://www.econbiz.de/10005504452

Cross-Country Variations in Capital Structures: The Role of Bankruptcy Codes

Acharya, Viral V; John, Kose; Sundaram, Rangarajan K - C.E.P.R. Discussion Papers - 2005

things, the theory predicts that the difference in leverage between a debt-friendly bankruptcy code (such as the UK’s) and a … support for the theory by comparing leverages in the US and the UK for the period 1990 to 2002. Our tests use two (inverse … find the theory is strongly backed by the data. The results are robust to considerations such as employing net leverage …

Persistent link: https://www.econbiz.de/10005504655

Credit, Wages and Bankruptcy Laws

Biais, Bruno; Mariotti, Thomas - C.E.P.R. Discussion Papers - 2003

We study the impact of different bankruptcy laws in general equilibrium, taking into account the interactions between the credit and labour markets, as well as wealth heterogeneity. Soft bankruptcy laws often preclude liquidation, to avoid ex-post inefficiencies. This worsens credit rationing,...

Persistent link: https://www.econbiz.de/10005498012

Financial Structure and Macroeconomic Volatility: Theory and Evidence

Huizinga, Harry; Zhu, Dantao - C.E.P.R. Discussion Papers - 2006

This paper presents a simple model capturing differences between debt and equity finance to examine how financial structure matters for macroeconomic volatility. Debt finance is relatively cheap in the sense that debt holders need to verify relatively few profitability states, but debt finance...

Persistent link: https://www.econbiz.de/10005498044

Optimal Debt Contracts under Costly Enforcement

Hvide, Hans K; Leite, Tore - C.E.P.R. Discussion Papers - 2007

We consider a financing game with costly enforcement based on Townsend (1979), but where monitoring is non-contractible and allowed to be stochastic. Debt is the optimal contract. Moreover, the debt contract induces creditor leniency and strategic defaults by the borrower on the equilibrium...

Persistent link: https://www.econbiz.de/10005498123